Suez Canal blockage further strains global supply chains

The 13,000-foot-long Ever Given container ship ran aground in the Suez Canal on Tuesday, blocking shipping traffic in both directions. Photo: NOAA's National Ocean Service/Wikimedia Commons

March 26 (UPI) — Strained global supply chains are tightening further as the Suez Canal — one of the world’s busiest waterways — remained blocked Friday by the 224,000-ton cargo ship Ever Given.

As the traffic jam grows by the hour, experts say the delay is stressing a strained supply chain amid a pandemic-driven import surge driven by U.S. consumers.

“There’s been a great convergence of constraints in supply chains like I’ve never seen before,” Bob Biesterfeld, CEO of logistics firm C.H. Robinson, told CNN.

After the pandemic forced factories to close, a pickup in demand for household items stretched suppliers. Last year, global importers increasingly relied on the Suez Canal to avoid congestion at West Coast ports in the United States that sometimes added weeks to deliveries coming from Asia.

The Ever Given ran aground Tuesday during a sandstorm in the canal, which is operated by the Egyptian government. Tugboats had made little progress early Friday in a dredging effort to refloat the vessel.

The United States joined the international effort to rescue the ship Friday, the Suez Canal Authority said. ABC News reported Egypt already hired the Netherlands’ Smit Salvage and Japan’s Nippon Salvage to assist.

“The Suez Canal Authority values the offer of the United States of America to contribute to these efforts, and looks forward to cooperating with the U.S. in this regard in appreciation of this good initiative which confirms the friendly relations and cooperation between the two countries,” the SCA said.

The backup is expected to impact the arrival of U.S. imports that fill store shelves.

The blockage is costing nearly $400 million per hour, NBC reported, as shipping companies create contingency plans, including rerouting vessels around the southern tip of Africa. Along with higher shipping costs and the scarcity of containers, these expenses could mean higher prices for consumers and rising inflation.

The Suez Canal, which was built in 1869 and separates Africa from Asia, provides a direct route between the Atlantic and Indian oceans.


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